Aldeer.com Forums Alabama Deer Talk Aldeer General Forum Timber prices?

.......and people wonder why they are turning it back into row crop at a $60-$70 lease rate. $3000 an acre (which is a fantastic price) after 30 yrs of growth, worrying about hurricanes, tornados, beetles, etc. or you can just lease it out and $70/acre/year with no risk. Steady annual cashflow, and after just 10 yrs in, you've made/pocketed $7000/acre, which is over double what you would've had at 30 yrs with timber. Thirty yrs in on the crop lease and youre sitting at $21,000/acre which is really 10X what a normal, real good timber harvest rate per acre yields.

I wish I could grow a crop on mine I’d love to have half mine in ag but mine is hills and hollers so I’m stuck with timber.

Check your math, bro

youre right, LOL 700 after 10 yrs, not 7000. Return would be pretty much the exact same as a good timber harvest. My mental math is normally spot on but....One to many zeros on my yearly multiplier. I was shocked to hear crop going at $70/acre. Ran that math and was wondering why the entire south was not currently being pushed up and converted to row crop. Only advantage would be the time value of money and zero risk of timber loss.

You’re right. There’s a lot less risk, if you can keep a farmer.

The real issue is simply that a 5-7% return is garbage when consider the hold period and risk involved. You can easily get that in other places, safely, based solely on the annual cash flows. That's not taking into consideration unrealized gains on alternative investments. Timber lands in terms of the value of the dirt hasn't ever exactly seen massive gains overall, ever. There are exceptions... say you get lucky and Dollar General wants to drop a store on your little tract... well that changes the game. At that point did you buy the dirt for the wood or did you speculate you would develop the land?

There are a lot of nuances to this in terms of how and who makes money.

The entire industry is potentially going belly up IMO. Landowners are not making money. Couple that with the fact that low interest rates are likely gone forever. Owning something that is near worthless and doesn't produce a desired return on investment will ultimately determine the outcome. It's just reality that EVERYONE in the chain of events from when a tree is planted until it becomes a 2x4 has to make money or the industry will change. Even the little guys have to turn a profit. That's a healthy industry. When market conditions dictate that you are much better off putting your money into an alternative investment that's bad for the industry.

I don't know what is going to happen and because trees have such a long growth period it could be decades in the works. That means you can't predict the future. In 30 years who knows. But right now we know for sure Timber is a terrible investment given current market conditions and the realistic outlook. We've got too many trees. That can change quickly look at the oil/gas industry. Talking about Tariffs as an example.

It's a dumpster fire.

An also the timber company leasing huntings rights for $5 to $10 an acre on top of farmers lease . All they got is smz a few hollows to hunt but they have to pay for the fields that farmers use. Crazy. This past year one of the farmers got permit from twra to kill deer eating his crops. Hunters didn t know till one them out there one night just riding around a caught some guys with spotlight smoking deer . Called warden and the guys had a permit to kill all deer . The hunters was mighty upset . The landowners had no clue this was going on. This in wayne county tn

And keep in mind they probably will never build another new pulp mill in the US!! The GP mill at Claiborne was built in the mid 70’s and I think its the newest one in the southeast.

Why will they never build another one? I’m saying they will, but several have spent millions in upgrades in the past few years.

$1/ton pine pulp in my area.

The change to cropland has been going on for quite some time. On my many trips up here prior to retireing I noticed several years ago along the I-10 corridor between Tallahassee and west of I-75 that large timber tracts were being cut and turned into irrigated ag fields. In a couple of cases the pines were cut pretty young.

Government programs help drive the future market. Shortleaf initiatives, shortleaf hardwood initiatives and longleaf etc…. Covering more than planting cost helps push whatever the federal government wants.
Land is what’s been the money maker, small farm/ranch type family homes. I have friends making bank for sometime in that market.

As far as Ag, if you have really good ground I’ve heard of 200-300 an acre payouts off percentage of profit. Usually 20%, sometimes 20% or 100 an acre whichever is higher. Just depends how desirable your land is. Where our farm is it’s just 20% because it’s wet ground and crop yields vary year to year.

Recently a friend made some good money on a second thinning of pines with some junk hardwood mixed in. Was wet Ag fields converted to pine stands for the most part.

Loggers dropping like flies around here. Even some crews that work directly for the mill are on tight quotas. Ppw around 10 canter around 14 logs around 30